Stocks closed the week mixed as traders balanced strong corporate earnings with ongoing uncertainty around inflation and global trade. Early in the week, solid earnings from several major banks helped lift financials and support broader market optimism. However, midweek volatility returned following hawkish comments from several Federal Reserve officials, who reiterated a cautious stance on rate cuts amid sticky core inflation. Energy stocks slid as oil prices dipped following a surprise build in U.S. inventories and easing tensions in the Middle East. Meanwhile, the tech-heavy Nasdaq posted modest gains thanks to strong results in the semiconductor space. By the end of the week, the S&P 500 was slightly higher, while the Dow and Russell 2000 edged lower. Treasury yields hovered near recent highs, with the 10-year settling at 4.22%.
Last Week’s Economic News
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- Retail sales rose 0.6% in March, signaling continued consumer strength despite higher borrowing costs.
- Industrial production was unchanged in March, while manufacturing output dipped slightly by 0.1%.
- Initial jobless claims for the week ending April 12 totaled 214,000, down 9,000 from the prior week.
- Housing starts fell 10.7% in March, while building permits—a leading indicator—declined 4.3%.
- The Conference Board’s Leading Economic Index declined 0.3% in March, continuing a downward trend.
Eye on the Week Ahead
Investors will watch closely as the first estimate of first-quarter GDP is released this week. Economists are forecasting growth to slow modestly from Q4’s 3.4% pace. Also due are updates on new home sales and the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge.
Have a nice week!
Sincerely,
Robert G. Carpenter